Status

Project Basics

ARENA Program

Lead Organisation

Start Date

Project Partners

ITK; Institute for Sustainable Futures (ISF)

Location

Australian Capital Territory, New South Wales, Queensland, South Australia, Tasmania, Victoria, Western Australia

Status

Current

Summary

ARENA commissioned a study of options for dispatchable renewable electricity generation that can support a secure, reliable and affordable electricity system with a higher share of renewable energy. The outputs are a report and a spreadsheet-based cost model.

Comparison of Dispatchable Renewable Energy Options – Technologies for an orderly transition examines individual technologies and combinations to classify their characteristics, appropriate uses, costs and sensitivities in a transparent and consistent way. It provides a broad overview of different technologies, rather than a detailed, in-depth analysis of any one technology.

The analysis suggests a wide range of options are available, with a range of performance characteristics.

Different technologies and configurations suit different market needs. For example, batteries are more competitive for short-duration storage, whereas pumped hydro or concentrating solar thermal are more competitive for long duration storage.

Key results, such as the above estimated range of competitiveness, are based on 2017 costs. Costs are likely to continue to fall in real terms. The accompanying spreadsheet can be used to estimate future costs based on global growth assumptions.

How the project works

The study is focused on individual technologies, their costs and performance characteristics. It does not estimate the amount of these technologies that would be needed in a reliable electricity system. The report says portfolio diversification effects would almost certainly lead to a lower cost for a grid with a high share of renewables than the cost of an individual dedicated dispatchable renewable generation system.

The study outputs, in particular the estimated installed capital costs, can be used in electricity sector modelling projects to estimate how these technologies can contribute to reliable, affordable overall electricity supply.

The report finds that the Levelised Cost of Electricity (LCOE) of variable renewable energy (VRE) technologies was about $65 per megawatt-hour (MWh) in 2017. The report estimates the LCOE of dispatchable renewable technologies to be $90-140/MWh for technologies used daily.

Benefit

Only some of the generators in an electricity system will need to be dispatchable and a system can have a mix of both VRE and dispatchable renewable technologies. The cost of a mix of the two technology types would be somewhere between the two cost estimates. For example, at 2017 prices, a combination of 30% dispatchable renewable energy and 70% variable renewable energy (i.e. wind or solar) would take the average LCOE from $65/MWh to around $80/MWh – comparable to today’s wholesale energy prices.

The study includes two spreadsheet cost models that can be used to estimate the capital cost of generation facilities with different configurations. These can be drawn on in modelling studies to test the applicability of different types of dispatchable generation under various scenarios.

The Levelised cost calculator spreadsheet allows the user to estimate plant configurations that are optimised for daily usage using the method described in the report, and provides an associated installed capital cost and levelised cost of energy.

The Installed cost calculator spreadsheet allows the advanced user to estimate the installed capital cost of an arbitrary combination of energy collection, storage and power output subsystem sizes, but does not provide any guidance as to what an optimal plant configuration is. The outputs can be used by forecasters and modelers to test alternative plant configurations in electricity market modelling exercises.